Computer reservations system

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A computer reservations system (CRS) is a computerized system used to store and retrieve information and conduct transactions related to air travel. Originally designed and operated by airlines, CRSes were later extended for the use of travel agents; major CRS operations that book and sell tickets for multiple airlines are known as global distribution systems (GDS). Airlines have divested most of their direct holdings to dedicated GDS companies, who make their systems accessible to consumers through Internet gateways. Modern GDSes typically allow users to book hotel rooms and rental cars as well as airline tickets.

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[edit] History

In the early days of American commercial aviation, passengers were relatively few, and each airline's routes and fares were tightly regulated by the Civil Aeronautics Board. These were published in a volume entitled The Official Airline Guide, from which travel agents or consumers could construct an itinerary, then call or telex airline staff, who would mark the reservation on a card and file it. As demand for air travel increased and schedules grew more complex, this process became impractical.

In 1946, American Airlines installed the first automated booking system, the experimental electromechanical Reservisor. A newer machine with temporary storage based on a magnetic drum, the Magnetronic Reservisor, soon followed. This system proved successful, and was soon being used by several airlines, as well as Sheraton Hotels and Goodyear for inventory control. It was seriously hampered by the need for local human operators to do the actual lookups; ticketing agents would have to call a booking office, whose operators would direct a small team operating the Reservisor and then read the results over the telephone. There was no way for agents to directly query the system.

In 1953, Trans-Canada Airlines (TCA) started investigating a computer-based system with remote terminals, testing one design on the University of Toronto's Manchester Mark I machine that summer. Though successful, the researchers found that input and output was a major problem. Ferranti Canada became involved in the project and suggested a new system using punch cards and a transistorized computer in place of the unreliable tube-based Mark I. The resulting system, ReserVec, started operation in 1962, and took over all booking operations in January 1963. Terminals were placed in all of TCA's ticketing offices, allowing all queries and bookings to complete in about one second with no remote operators needed.

In 1953, American Airlines CEO C. R. Smith chanced to sit next to R. Blair Smith, a senior IBM sales representative. Their idea of an automated Airline Reservation System (ARS) resulted in a 1959 venture known as the Semi-Automatic Business Research Environment (SABRE), launched the following year. By the time the network was completed in December 1964, it was the largest civil data processing system in the world.

Other airlines soon established their own systems. Delta Air Lines launched the Delta Automated Travel Account System (DATAS) in 1968. United Airlines and Trans World Airlines followed in 1971 with the Apollo Reservation System and Programmed Airline Reservation System (PARS), respectively. Soon, travel agents began pushing for a system that could automate their side of the process by accessing the various ARSes directly to make reservations. Fearful this would place too much power in the hands of agents, American Airlines executive Robert Crandall proposed creating an industry-wide Computer Reservation System to be a central clearinghouse for U.S. travel; other airlines demurred, citing fear of antitrust prosecution.

In 1976, United began offering its Apollo system to travel agents; while it would allow the agents to book tickets on United's competitors, the marketing value of the convenient terminal proved indispensable. SABRE, PARS, and DATAS were soon released to travel agents as well. Following airline deregulation in 1978, an efficient CRS proved particularly important; by some counts, Texas Air executive Frank Lorenzo purchased money-losing Eastern Air Lines specifically to gain control of its SystemOne CRS.

European airlines also began to invest in the field in the 1980s, propelled by growth in demand for travel as well as technological advances which allowed GDSes to offer ever-increasing services and searching power. In 1987, a consortium led by Air France and West Germany's Lufthansa developed Amadeus, modeled on SystemOne. In 1990, Delta, Northwest Airlines, and Trans World Airlines formed Worldspan, and in 1993, another consortium (including British Airways, KLM, and United Airlines, among others) formed the competing company Galileo International based on Apollo. Numerous smaller companies have also formed, aimed at niche markets the four largest networks do not cater to.

[edit] Major systems

Name Created by Also used by US Market share*

Amadeus

 9.2%
SABRE 44.7%
Galileo 19.7%
Worldspan 26.5%
  • CRS airline bookings, 2002.
  • In December 2006, Travelport, which owns Galileo, agreed to buy and merge with the Worldspan GDS. The combined company would then control a 46.3% market share using 2002 airline booking data.
  • Worldspan's market share is 16.9% globally and 31% in the U.S. according to 2006 MIDT airline transaction data.
  • In March 2007, Royal Dutch Airlines KLM switched from Galileo to Amadeus as a result of the merger with Air France.

[edit] Recent developments

The system architectures of the four major GDSes are largely based on a mainframe Transaction Processing Facility framework, which, while reliable and capable of large workloads, has relatively little processing power and can be expensive to maintain and upgrade. Recently, the companies have begun selectively migrating processes from their older mainframes to service-oriented architectures. By using high-performance, lower-cost platforms, they improve their capacity to handle a fast-rising "look-to-book" ratio; that is, the total number of shopping transactions compared to actual purchases. The ratio has increased over time as Internet bots search GDSes more frequently and consumers compare offers before buying more often.

The declining cost of modern server hardware and the relatively recent introduction of automated pricing, shopping, and booking software has allowed many airlines to shift significant buying volume to their own websites, thereby avoiding GDS distribution fees of $4 or more per flight segment. (The average flight consists of 2.5 segments.) It remains uncommon for a travel agency to operate without the use of at least one of the four major GDSs. Meanwhile, the GDS companies have developed their own Web interfaces, and now sell their services directly to consumers through sites such as Expedia (formerly owned by IAC/InterActiveCorp, but now spun off into a separate company called "Expedia Inc."), Travelocity (owned by SABRE), and Orbitz (formerly owned by Cendant, which is now a wholly-owned subsidiary of Blackstone called Travelport). Further competition exists in the form of newcomers to the business such as ITA Software.

United States Department of Transportation regulations governing CRSes were eliminated by July 31, 2004, but CRSes remain subject to government regulations in Canada and the European Union. Since all of the major GDS companies operate globally, the most restrictive requirements—currently those of the European Union—effectively govern all their operations. The companies have been lobbying Canada and the European Union for total deregulation of the industry.

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[edit] External links